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Market Analysis of Irrigation Pumps in Surat and Navsari Districts of Gujarat 51

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Market Analysis of Irrigation Pumps in Surat and Navsari Districts of Gujarat 51 IMPACT: International Journal of Research in Business Management (IMPACT: IJRBM) ISSN(P): 2347-4572;ISSN(E): 2321-886X Vol. 4, Issue 9, Sep 2016, 49-58 © Impact Journals MARKET ANALYSIS OF IRRIGATION PUMPS IN SURAT AND NAVSARI DISTRICTS OF GUJARAT CHIRAG PATEL 1 & RITAMBHARA SINGH 2 1Student, International Agribusiness Management Institute, Anand Agricultural University, Anand, Gujarat 2Assistant Professor, Department of Agribusiness Economics and Policies, International Agribusiness Management Institute, Anand Agricultural University, Anand, Gujarat ABSTRACT The Indian agriculture sector is the largest consumer of pumps, with pumps being used in several applications such as irrigation and water distribution. This study was a part of project carried out for The Standard Agro Engineers headquarted in Rajkot, Gujarat. The study covered 200 farmers and 25 dealers, selected as per convenience from 8 villages of Surat and Navsari districts of Gujarat (4 villages from each district). It was found that the higher water output from the pumps was the most important factor behind the purchase of pumps followed by proximity to the specific brand dealer, low voltage compatibility, price, brand name, guarantee/warrantee, low operating cost, credit facility, and quality standards such as ISI mark. Competitor analysis for The Standard Agro Engineers shows that majority of the market share was captured by Shiv Shakti pumps, followed by Freedom pumps, and V-Guard pumps. The market potential of irrigated pumps in the study area was estimated as INR Eighty Five Crores Twenty Five Lakhs. It was found that frequent breakdown/ burnout of the was the major problem faced by the farmers, followed by low lifting capacity, non-availability of repair and maintenance facility in close proximity, low efficiency of pump, and low voltage. With the existing competitive environment, it was suggested that The Standard Agro Engineers should create brand awareness among farming community and should also setup distribution channel in order to gain trust of the farmers. KEYWORDS: Gujarat, Irrigation pumps, Market Potential, Competitor’s analysis INTRODUCTION The pump market in India was valued at INR 8,000 cr. in 2015, and is expected to reach INR 19,020 cr. by 2019, growing at a Compounded Annual Growth Rate (CAGR) of 17.5 percent. Large number of Small Scale Industries (SSI) units, large manufacturers and many overseas manufacturers comprise the Indian pump industry. The industry has both: organized and unorganised players, and faces tough competition from international companies with their base in India. Indian pump manufacturers appear to completely fulfill the domestic demand for pump usage, with more than 600 manufacturers producing around 1.2 million pumps annually (Anonymous 2012). The industry is balanced in terms of demand-supply, with domestic companies meeting 95 percent of the requirements and imports constituting the remaining 5 percent (Sant and Dixit, 2005). In India, pumps are used in the domestic, industrial and agriculture sectors. The Indian agriculture sector is the largest consumer of pumps, with pumps being used in several applications such as irrigation and water distribution; in the industrial and domestic sectors, pumps are used for water supply, sewage, chemical supply, etc. There are four key entities Impact Factor(JCC): 1.7539- This article can be downloaded from www.impactjournals.us 50 Chirag Patel & Ritambhara Singh involved in the value chain for agriculture pumps in India, manufacturer, Distributor, Dealer, and Retailer (Rajasekaran and Krupa, 2013) GROWTH DRIVERS FOR AGRICULTURE PUMP SETS • Sinking Groundwater Levels in the Country: Coupled with the increasing incidence of poor monsoons, this is posing a major challenge for Indian farmers. Therefore, the number of pumps installed in the country is expected to increase over time. • Government Initiatives: Both the central and various state governments have come up with various policies, like heavily subsidized electricity and other schemes which has promoted the use of pumps year on year basis. • Increasing Preference for Quality Products: With globalization and increasing market competition, there is a rising demand for high quality products. This is especially applicable in the states where pattern of large land holding is prevalent, such as Punjab and Haryana. Farmers in these regions are comparatively more aware about the benefits of quality pumps. • Increased levels of production have had a direct impact on the income levels of farmers, and act as a key driving factor influencing the shift in priorities in pump selection from cost to quality. This shift has provided an immense boost to the organised sector, encouraging players to launch better quality pumps in the market. • Increase in Division of Land: The continuous increase in population and the number of nuclear families across India has prompted the rapid division of agricultural land, which, in turn, has led to an increase in number of land owners. In addition, the increasing trend of, and necessity for, independent irrigation facilities among farmers is driving the demand for the agricultural pumps in rural India. With this background, this study was conducted in Surat and Navsari districts of Gujarat (i) to examine the factors affecting buying decision of farmers, (ii) to conduct competitor analysis for The Standard Agro, (iii) to examine the market potential of Irrigation pump set, and (iv) to study the problems faced by farmers with the irrigation pumps. DATA AND METHODOLOGY The study was carried out during 1st January 2016 to 30th April 2016, in Surat and Navsari districts of Gujarat. The study was conducted on a sample of 200 farmers selected from 8 villages (Pardi, Chikhli, Kathor, Khanpur villages of Surat District and Alipore, Dabhel, Jogwad, Viraval villages of Navsari District ) of these districts. A total of 25 dealers were also selected from these districts. The sampling method was Non probability sampling under which convenience sampling technique was used. Primary survey was done with the help of structured schedule. Secondary data were collected from diverse public sources, such as the Ministry of Agriculture, other relevant ministries at the state level, trade bodies, industry associations, journals and articles, company websites and other relevant resources. Tabular Analysis, Graphical Presentation and Garrett’s Ranking Technique was used to analyze different objectives of the study. Garrett’s Ranking Technique • First stage: The sample farmers were asked to rank problems. Index Copernicus Value: 3.0 - Articles can be sent to [email protected] Market Analysis of Irrigation Pumps in Surat and Navsari Districts of Gujarat 51 • Second stage: Thus, ranks assigned by the individual respondents were converted into percent position value by using the formula. Per cent position= 100(Rij-0.5)/Nj Where, Rij stands for rank given for ith factor by the jth individual. Nj stands for number of factors ranked by jth individual. • Third stage: For each percent position, scores were obtained with reference to Garrett’s Ranking Conversion table and each percent position value was converted into scores by reference to Garrett’s Table. • Fourth stage: Summation of these scores for each factor was worked out for the number of respondents who ranked for each factor. Mean scores were calculated by dividing the total score by the number of respondents. • Fifth stage: Overall ranking was obtained by assigning ranks I, II, III, IV and V in the descending order of the mean score. LIMITATION OF THE STUDY • The study was conducted in a specified time period, therefore could have been more exhaustive if time period was extended. • The sampling was done as per convenience. The selected sample might not be the true representative of the population. • The respondents may have been biased while giving information. • Uneven availability of secondary data. RESULTS AND DISCUSSIONS The results were analyzed mainly with respect to the response of the respondents. The response of the respondents were observed and noted down. General Characteristics At the aggregate level, data from the surveyed region stated that 48 per cent of the total farmers were small, 32 per cent were marginal farmers, 14 per cent were medium farmers, and around 6 per cent were large farmers. About 63 per cent of the respondents had their own land for cultivation where as 37 per cent of the farmers in the study region were farming on leased land. Even small and marginal farmers (nearly 20 per cent) had pumps, as most of these farmers used their pump for hiring out that makes pump purchase economically viable. Out of total sample surveyed, about 55 per cent respondents had only farming as their occupation or source of earning, 29 per cent were engaged in farming and services, and 12.5 per cent respondents were engaged in farming and business as well, to earn their living. About 53 per cent of the total cultivable land was irrigated and rest 42 per cent land was rainfed, indicating a huge scope for the pump market to grow in the study area. Major crops in this region were Rice followed by Sorghum, Wheat, Cotton, Pigeon pea, Indian bean, Banana and Sugarcane (Table 1). Pigeon pea and Indian bean are cultivated only in rainfed conditions while Wheat, Impact Factor(JCC): 1.7539- This article can be downloaded from www.impactjournals.us 52 Chirag Patel & Ritambhara Singh Banana, and Sugarcane are cultivated in irrigated conditions. Some crops like Rice, Sorghum
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